The near term future, page-75

I'd be very happy if either those EPS estimates turn out to be close to the mark.

Obviously I could be wrong, but based on the Q1 results and what we've been told, I've set my expectations for the FY23 EPS to be around (1.38) which I'd still be happy with given how quickly the return on investment should be if J.C. continues to execute on his statements. This FY23 EPS estimate excludes commercial revenue over guidance and BARDA orders (both are possible and $5m from either/both would get the EPS down into the (1.17)-(1.20) range).

My estimates for this exercise are based on the following:

• FY23 revenue guidance is currently $49-51m ~ I've worked on $51m with revenue ramping up. "What will really be exciting, quite honestly, is our exit rate in Q4, because it's going to really position us for high growth in 2024."
• When comparing the S&M expenses between Q422 and Q123, there was a $200K increase which indicates that they hadn't hired many additional sales staff during Q1. They had hired the 40 additional staff by mid May ~ there'll be a ramp up in S&M expenses during Q2, and the full S&M expenses in Q3 and beyond.
• "Expansion of our US field sales organization will result in a peak operating expense as a percent of revenue in Q3 2023." I couldn't achieve the peak in opex/revenue to occur in Q3 in my estimate (peak was in Q2) ~ I'm assuming because the sales expansion was executed ahead of schedule.
• G&A expenses for Q1 where higher due to one-off severance payouts and compensation ~ guessing it will reduce over the remainder of the year.
• R&D expenses for Q1 increased due to RECELL GO and additional costs associated with the deployment of a team of Medical Science Liaisons for the soft tissue launch. RECELL GO testing was still underway and FDA submission occurred in Q2 ~ expenses should reduce over the year.
• I don't know how to work out the tax provision so I left it blank (looks minor anyway).

If my estimate for Q2 turns out to be close, we could be in for another EPS miss (-27% to -35% depending where you look for consensus estimates). Given the market is supposed to be forward looking, hopefully the disappoint to some will be offset by revenue guidance and other positive updates. If not, at least it could provide another buying opportunity for those who look beyond the Q2 results.

Going through this exercise highlights to me that EPS guidance would be appreciated by anyone who attempts to forecast it

P.S. I hope you're leg is feeling better!